Far too many retired Australians have not granted a financial Enduring Power of Attorney, which can lead to problems for their loved ones and unnecessary family conflict, said Anna Hacker, wills and estates accredited specialist at Equity Trustees Limited (EQT).
“As Australians live longer, it becomes increasingly necessary to have measures in place in case they become mentally incapable of making decisions or physically unable to cope.
“I would suggest that having a financial Enduring Power of Attorney is as important as a Will for the retired and if they don’t already have one every Australian should sign a financial Enduring Power of Attorney when they retire.
“Indeed, every retired Australian should have both a Will and a financial Enduring Power of Attorney – if not, they are likely to cause problems for their family. Yet far too many Australians have neither. ”
Ms Hacker said that, put simply, a Will gives instructions as to what happens to their assets when they die, and an Enduring Power of Attorney allows the nominated Attorney, or Attorneys, to take action if the granter is no longer capable of doing it for themselves.
“The people nominated can only make decisions to do with finance or property and in these areas all actions taken are legally binding.
“However, the financial Enduring Power of Attorney does not cover other areas such as decisions about care or medical treatment.
“One or more people can be appointed with a financial Enduring Power of Attorney and often it is the same person or people nominated as Executor in the Will – but it doesn’t have to be.”
Ms Hacker said it is important for anyone appointed with a financial Enduring Power of Attorney to have an intimate knowledge of the person’s financial affairs.
“It is important that all cards are placed on the table by anyone nominating an Attorney to act, to prevent costly oversights.“
Without this knowledge, bills may not be paid, share entitlements lost, and property forfeited.
“The responsibilities of a person named as the Attorney can be quite onerous and any actions taken must, by law, be motivated solely in the best interests of the person granting it.“
They cannot take any action that benefits themselves or others - such as fee arrangements -unless it is specified in the document itself.
“Only the person granting a financial Enduring Power of Attorney or the State Administrative Tribunal can cancel it.”
Ms Hacker said that EQT recommends that when people create a financial Enduring Power of Attorney, they should consider documenting their thoughts on what they would like to happen if they become incapacitated.
“This way, their wishes are made clear to the people who need to make decisions on their behalf.“
Having a financial Enduring Power of Attorney is particularly important for those who have responsibility for others, such as dependants,” she said.